Increments are also on the table, as is the possibility of pay cuts for higher grades.

The cull of staff numbers in the public service will continue with the possibility of further redundancies.

Unions react to proposals

General Secretary of the Civil and Public Service Unions Eoin Ronayne said it will be almost impossible to work through the list of savings proposed by Government.

He said removal or changes to flexi-time could cost his members €50 a week in additional childcare, which they see as a pay cut.

Mr Ronayne was critical of the decision to outsource work for the collection of the local property tax.

After the meeting, a spokesperson for the Department of Public Expenditure and Reform said it had been a high-level engagement between both sides.

It was described as a "listening exercise" where both sides had tabled their proposals.

She said employer proposals related to productivity and efficiency measures.

The group will reconvene tomorrow and agree a schedule for engagement over the coming weeks with a view to concluding as soon as possible.

Compulsory redundancies

Speaking earlier on RTÉ's Morning Ireland, Minister for Education Ruairi Quinn said he is not in a position to say if any new public service agreement would also include compulsory redundancies.

He said the Government is looking to extend the Croke Park Agreement framework in order to find further savings.

Mr Quinn said that details of any new agreement "should be left to the initial talks participants".

Public service unions have described the negotiations as challenging, problematic, alarming and worrying.

General Secretary of the Irish National Teachers' Organisation Sheila Nunan said before the talks that all public servants, including teachers, had taken huge cuts in pay and were very alarmed at items on the agenda.

General Secretary of the Irish Federation of University Teachers Mike Jennings said it was remarkable that they were going into a set of talks where it was question of trying to minimise pain instead of trying to achieve any gain whatsoever.

He said that was a very uncomfortable place for trade unions to be.

Irish Nurses and Midwives Organisation's General Secretary Liam Doran said he is extremely pessimistic about the prospects of any agreement being reached on an extension to the Croke Park Agreement.

Speaking on RTÉ's Today with Pat Kenny programme, Mr Doran said the vast majority of nurses and midwives are on ordinary incomes.